Frank Lorenzo and CAL??

[B-J-J Fighter]

Was Lorenzo CEO or President of CAL at one time? What kind of footprint did he leave at CAL? Was he at CAL before or after EAL? This was a little before my time and I have seen his name brought up sometimes when talking about CAL. Thanks.

 

[Sim Sweat]

When Lorenzo owned Texas Air, he used it to acquire EAL and CAL. EAL folded, but he sold off CAL, which is why it survived.

 

[ozpilot]

If your interested in Lorenzo, and the history of airline management during his time, I would strongly recommend this book ....

http://www.amazon.com/gp/product/08...002-1870268-8664029?n=507846&s=books&v=glance

 

[Sim Sweat]

A little more info:
----------------
Frank Lorenzo, owner of Texas International Airlines, took over People Express, Continental Airlines, New York Air and Eastern Airlines in the early 1970's and 1980's. Upon control of Continental, Lorenzo file for reorganization under the bankruptcy laws. He then laid off his work force and brought in non-union workers and restarted the airline. This move allowed him to cut union personnel wages in half by bring in non-union workers. Lorenzo then slashed airfares causing an airfare war throughout the industry. Airlines had great difficulty in keeping their doors open. Many air carriers had to merge in order to survive. Lorenzo, with a desire to have major control of air passenger industry, sought and gained control over Eastern Airlines and Frontier Airlines. This move made Texas Airline one of the biggest airlines in the country. The move by Lorenzo forced the merger of many air carriers in order to remain viable. Air carriers could not compete with current airfares unless they merged with other carriers. TWA acquired Ozark, Delta Airlines acquired Western Airlines and Northwest acquired Republic Airlines. Lorenzo was not satisfied. Driven by profits, Lorenzo requested machinists of Eastern Airlines to take a pay cut. However, the machinist union refused to do so. This brought about a war between labor and management. The machinist union IAM (International Association of Machinist and Aerospace Workers) called for a strike. The strike brought about air passenger delay and the company began loosing millions in daily revenues. The United States Bankruptcy Court intervened after a creditor brought suit against Eastern Airlines. The court very much aware of Lorenzo's labor practice, appointed Martin Shugrue as temporary trustee over Eastern.
Eastern was unable to overcome its fiscal downfall and as a result was forced to close its door. Many had accused Lorenzo of selling off assets and transferring Eastern's aircrafts to Texas Air. Other accusations included depleting Eastern's pension fund. Many felt Lorenzo was only interested in purchasing defunct air carriers in order to strip the carriers of its assets. This was a major blow to Lorenzo's credibility in the business community.
In the summer of 1991, Lorenzo sold off most of his investments with Continental Airlines. This allowed Continental to further grow as a result of IAM and other unions had kick up a storm. The Scandinavian airline that bought Continental also insisted that Lorenzo leave, and sign a pact to stay out of the airline business for seven years. But that didn't stop Lorenzo from trying to start up another small airline in Baltimore, which he ironically wanted to call Friendship, in 1993. After a flurry of union protest, the U.S. Department of Transportation denied Lorenzo's bid to establish the airline, saying he was unfit to fly "in accord with the public interest."
Found here: http://avstop.com/History/HistoryOfAirlines/FrankLorenzo.html
------------------

A real class guy, Lorenzo. He put countless numbers of pilots and others out of work with never a care for them or their families.

 

[MAS]

Hard Landing... definately an excellent book... you can go from knowing zero about airline history to knowing quite a bit about every big name at the time... but its not written like a history book... it is some of the most entertaining nonfiction i have ever read

 

[PCL_128]

Also check out Flying the Line Volume II. Lots of info about that scumbag Lorenzo. Grounded: Frank Lorenzo and the Destruction of Eastern Airlines is a pretty good book also.

 

[AV80R]

"The Scandinavian airline that bought Continental also insisted that Lorenzo leave, and sign a pact to stay out of the airline business for seven years.”

Just a small correction: The Scandinavian airline (SAS) did not buy Continental but merely a minority stake in it. Nevertheless, the unions of SAS (pilots, fa's and mechanics) threatened with a strike unless SAS sold the stake in what they perceived as a “union-killing” airline. I guess the pressure put on Lorenzo was great enough for him to resign.

Hope I got it right, great summary btw.

 

[lonelyguy]

Frank Lorenzo

"The Scandinavian airline that bought Continental also insisted that Lorenzo leave, and sign a pact to stay out of the airline business for seven years.”

Just a small correction: The Scandinavian airline (SAS) did not buy Continental but merely a minority stake in it. Nevertheless, the unions of SAS (pilots, fa's and mechanics) threatened with a strike unless SAS sold the stake in what they perceived as a “union-killing” airline. I guess the pressure put on Lorenzo was great enough for him to resign.

Hope I got it right, great summary btw.

I have two words to descibe Frank Lorenzo.Scum Bag

 

[aa73]

Scum Bag? You are insulting the integrity of Scum Bags!

Lorenzo lives in a heavily guarded and fenced-in chateau in France.

 

[Publishers]

Not disagreeing with the synopsis but the summary is a bit one sided and does not really tell the story. There were a good many factors going on at once in the industry and one is giving Frank way to much credit, even in the negative, for his role in all of this. There were a number of individuals who had tremendous impact and who have been forgotten while for some reason Lorenzo keeps his role at the forefront.

 

[Cardinal]

Striker Hugh Scott related the following grim tale.

“After all the strikers had left, the copilot, who had a reputation for whining, approached me and started complaining about the labor protest, then almost two years old. He said he was tired of striking and wanted to go back to work. Hell, I was tired of it, too, but sewing needles up my nose couldn't make me scab. So I blew him off.”

The next morning, May 2, 1985, pilot George Leonhardt was found in his garage, hanging from a rafter. He left a wife and three children.

This whole debacle was a big deal, destroying a very many lives.

In addition to Hard Landing and Flying the Line Vol. II I heartily recommend J.T. Bertrand's. A Collision with Collusion: The Pilots of Continental Airlines and Continental Airlines at the Brink. http://www.amazon.com/gp/product/0970017200/ if you're looking for the pilot's perspective and the detailed history of the bankruptcy and strike. And when you need a break form the heavy stuff, the appendix in the back has page after page of stupid pilot tricks pulled off during the scab years.

 

[Publishers]

Like any issue, there is much to be learned from this and much of it was pilot lore. Frank Borman and Charles Bryan along with Judge Frank Crystal all played important parts in the Eastern demise. When deregulation came along, the Braniff chairman whose name escapes me bet the farm that regulation would return and tried to get aircraft on as many routes as possible. The strategy failed and the debt and competition killed that one off. I still have one of their inflight magazines off the last 727 we repossessed from them.